Core & Main Inc (CNM)
Interest coverage
| Jan 28, 2024 | Oct 29, 2023 | Jul 30, 2023 | Apr 30, 2023 | Jan 29, 2023 | Oct 30, 2022 | Jul 31, 2022 | May 1, 2022 | ||
|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 580,000 | 571,000 | 567,000 | 565,000 | 560,000 | 524,000 | 458,000 | 355,000 |
| Interest expense (ttm) | US$ in thousands | 81,000 | 79,000 | 75,000 | 70,000 | 66,000 | 59,000 | 55,000 | 75,000 |
| Interest coverage | 7.16 | 7.23 | 7.56 | 8.07 | 8.48 | 8.88 | 8.33 | 4.73 |
January 28, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $580,000K ÷ $81,000K
= 7.16
Interest coverage is a key financial ratio used to assess a company's ability to meet its interest payment obligations from its earnings. Core & Main Inc has demonstrated a consistent and relatively strong interest coverage ratio over the past few quarters. The interest coverage ratio has been above 7 for all periods, indicating that the company's operating income is sufficient to cover its interest expenses at least seven times over.
The trend in Core & Main Inc's interest coverage ratio shows a slight decline from a high of 8.88 in October 2022 to 7.16 in January 2024. Despite this decrease, the interest coverage remains comfortably above the industry benchmark of 2, suggesting that the company has a strong financial position and is capable of servicing its debt obligations efficiently.
Overall, the consistent and relatively high interest coverage ratio of Core & Main Inc indicates that the company has a solid ability to meet its interest payments and implies a lower risk of default on its debt obligations. However, it is essential for the company to monitor this ratio closely to ensure its financial health and stability in the long term.